Budget 2024: Tax parity between ULIPs and mutual funds needed, says George Thomas of Quantum AMC
Budget 2024. Private banks and top IT companies could perform well in the near future. And as far as broader markets are concerned, the calendar year returns could be in the low double-digit, asserts George Thomas, fund manager (equity) of Quantum Mutual Funds, in a telephonic interview with MintGenie.
He also says that the government should bring some tax parity between ULIPs and mutual funds in the Budget 2024. George suggests that it is time for investors to opt for asset re-allocation in favour of large-cap funds and urges investors not to expect the repeat of good show in market in 2024 just as we witnessed in the preceding year. I don’t expect any dramatic change.
There are higher chances that the government would focus more on the fiscal side. Last few years, we have seen a higher allocation to capital expenditure. Now, it could be moderated a bit.
There could, however, be bit of positive on the rural side. Private banks look okay and will perhaps do well after elections. This (their performance) will give support to the credit growth too.
Top IT companies could also do well as the incremental data point suggests. The taxation of mutual fund should be at par with the ULIPs (unit linked insurance plans) which have favourable taxation. When premium paid towards ULIPs is lower than ₹2.5 lakh then the returns are tax-free.
Some tax parity between the two (ULIP and mutual funds) is desirable. Additionally, equity funds of funds are treated at par with debt mutual funds, whereas their underlying nature is that of equity. This should also be corrected in the Budget.
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